India’s passenger vehicle (PV) industry closed 2025 on a historic high, registering record sales and signalling powerful momentum across cars, SUVs, and electric vehicles. With wholesales surging nearly 26% year-on-year to around 407,000 units in December, this performance capped an extraordinary calendar year of 4.55 million units — the highest annual tally in the nation’s automotive history.
This article analyses the trends, policy drivers, and market dynamics behind India’s December 2025 car sales boom, and explores how automakers like Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Hyundai, Toyota, and Kia navigated an evolving landscape dominated by SUV preference and the accelerating shift toward electrification. It is designed for automotive professionals, investors, policy analysts, and consumers keen to understand what’s shaping the next phase of India’s vehicle market.
Table of Contents
- Sales Overview and Key Highlights
- Top Automakers and Performance Breakdown
- SUV Dominance and Changing Consumer Preferences
- Growth Drivers Behind the Surge
- Policy Support and Macroeconomic Boost
- Electric Vehicle Momentum in 2025
- Impact on Ancillary Industries and the Economy
- Key Automaker Profiles
- Geographical and Segmentation Analysis
- Challenges and Competitive Pressures in 2026
- Future Outlook and Industry Projections
- Conclusion
- FAQs
India’s passenger vehicle dispatches hit 407,497 units in December 2025 — the first time in history that monthly wholesales crossed 400,000. Compared to 322,965 units in December 2024, this reflects robust 26.2% year-on-year growth, defying global headwinds and supply chain pressures.
At the forefront was Maruti Suzuki, which sold 217,854 vehicles, commanding over half the market. Its domestic sales of 182,165 units underscored the recovery in small-car demand, while the company’s exports and OEM sales propelled overall performance. Closely following were Mahindra & Mahindra (50,946 SUVs), Tata Motors (50,519 vehicles), Hyundai Motor India (58,702 vehicles), Toyota Kirloskar (39,333 vehicles), and Kia India, which posted record sales of 18,659 vehicles — up a phenomenal 105% year-on-year.
The December surge rounded off a record-breaking 2025, bringing total passenger vehicle sales to 4.55 million units, up 5.7–6% over the previous year, setting the stage for continued momentum into 2026.
| Manufacturer |
Sales Performance & Key Highlights (December 2025) |
| Maruti Suzuki |
Total sales of 217,854 units, registering 22.3% YoY growth. Led domestic sales at 182,165 units. Dzire emerged as the top-selling model of 2025. |
| Hyundai Motor India |
Sold 58,702 units, up 6.6% YoY. Exports remained strong, while SUVs such as Creta and Exter continued to anchor volumes. |
| Tata Motors (Passenger Vehicles) |
Recorded sales of 50,519 units with 14.1% YoY growth. EV sales increased 24.2% to 6,906 units, led by the Nexon.ev. |
| Mahindra & Mahindra (SUVs) |
Achieved 50,946 units in sales, growing 23% YoY. Maintained domestic leadership in SUVs, driven by Thar and XUV range. |
| Toyota Kirloskar Motor |
Reported 39,333 units, a 33% YoY increase. Hybrid vehicles and MPVs supported momentum; domestic sales stood at 34,157 units. |
| Kia India |
Posted 18,659 units, marking 105% YoY growth. Logged its best-ever December, led by strong demand for Seltos and Carens. |
| JSW MG Motor India |
Sold 6,500 units, up 38% YoY. Growth supported by a balanced ICE-EV portfolio, with higher contribution from MG Comet EV. |
From Maruti and Tata to Mahindra and Hyundai-linked entities, see how India’s auto majors are moving as a group; view the complete Nifty Auto index breakdown.
SUVs continued to dominate India’s passenger vehicle landscape, constituting nearly 55.8% of total sales in December 2025, compared to 53.8% the previous year. This trend reflects a deep structural shift in consumer preference towards larger, feature-rich vehicles with higher ground clearance, advanced safety features, and enhanced connectivity.
Urban consumers gravitated toward compact and mid-sized SUVs like Hyundai Creta, Kia Seltos, Mahindra XUV700, and Tata Nexon, while rural buyers preferred rugged options like Bolero, Brezza, and Jimny.
Simultaneously, the small car segment, which had lost momentum in 2023–24, rebounded post-GST rationalisation in September 2025, signalling renewed affordability for first-time buyers.
India’s December car sales boom was underpinned by a mix of policy support, macroeconomic stability, and seasonal demand triggers.
Key growth factors included:
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GST Rationalisation (Effective September 2025):
The removal of cess on several models sharply reduced prices, bringing compact cars and sedans back into contention. Maruti Suzuki’s small car portfolio grew nearly 50%.
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Repo Rate Cuts and Liquidity:
The Reserve Bank of India reduced repo rates by 100–125 basis points during 2025, lowering EMIs and boosting vehicle affordability.
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Tax Incentives and Enhanced Disposable Incomes:
Income tax rebates up to ₹12 lakh encouraged middle-income households to advance purchases ahead of expected January 2026 price hikes.
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Favourable Monsoons and Festive Carryover:
Strong rural incomes following a good monsoon supported robust demand for entry-level cars and SUVs.
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Aggressive Year-End Discounts:
Automakers offered significant incentives to liquidate 2025 inventory, creating record month-end buying momentum.
Government policy played a decisive role in reviving India’s automotive sector in 2025. The rationalised GST, soft interest rates, and Make-in-India-driven localisation policies created a conducive environment for cost competitiveness and employment generation.
Additionally, the Vehicle Scrappage Policy stimulated demand for new, fuel-efficient cars, while state-level EV subsidies under the FAME-II scheme made electric options more viable for urban consumers.
The automobile industry’s contribution to GDP strengthened during the year, supported by ancillary sectors like steel, tyres, lubricants, and electronics.
Electric passenger vehicles achieved a landmark year with 176,500 units sold in 2025, representing a 77% year-on-year jump. Increasing model availability, improved charging infrastructure, and a cultural shift towards sustainability collectively enhanced EV penetration.
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Leaders in the EV segment included:
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Tata Motors, with Nexon.ev and Tiago.ev sales exceeding 6,900 units in December.
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MG Motor, expanding its EV footprint through Comet and ZS EV.
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Mahindra, entering the electric SUV space with the XUV400.
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Hyundai, preparing to launch mass-segment EVs to strengthen its BEV roadmap.
This rapid electrification trend positions India as an emerging EV manufacturing hub for Asia, with several global companies exploring local assembly partnerships.
The automotive sector’s growth produced a multiplier effect across core industries. Steel demand rose as automakers increased production schedules to meet backlogs estimated at 175,000 units. Ancillary suppliers in batteries, tyres, and infotainment systems also benefited from the surge.
According to ICRA forecasts, the passenger vehicle sector is set to register 1–4% growth in FY2026, contributing significantly to GDP expansion, with rising employment in manufacturing, dealerships, and services.
Maruti Suzuki India Limited
Maruti Suzuki remains India’s undisputed leader with a 40–50% market share. Once a joint venture between the Government of India and Suzuki Motor Corporation, it is now majority-owned by Suzuki (about 56% stake). The company focuses on dependable, fuel-efficient cars in both the budget and SUV segments, supported by more than 2,500 dealerships, including its premium NEXA network.
In 2025, Maruti exported nearly 396,000 vehicles, highlighting its status as India’s largest car exporter. Led by MD & CEO Hisashi Takeuchi, the company continues to leverage rural demand and localisation to sustain its leadership.
From compact cars to SUVs and EV-focused manufacturers, get a consolidated view of India’s passenger car companies shaping the next growth phase.
Tata Motors Passenger Vehicles
A division of the Tata Group, Tata Motors is India’s pioneer in electric mobility. It holds leadership in the EV category through Nexon.ev, Tiago.ev, and the premium-performance Curvv.ev platform.
The group operates under Tata Sons’ indirect control (~66%) and focuses on sustainable design, after-sales service, and innovative financing for urban consumers. December 2025 saw strong numbers — over 6,900 EVs were sold.
Mahindra & Mahindra
Founded by the Mahindra family, M&M enjoys dominance in the Indian SUV space, with flagship models such as Thar, Scorpio-N, and XUV700. The company integrates farm-equipment, electric mobility, and manufacturing synergies to reinforce supply chain resilience.
In CY2025, Mahindra sold approximately 476,000 SUVs, an 18% annual increase, reflecting its growing clout in both urban and rural markets.
Hyundai Motor India
A wholly owned subsidiary of Hyundai Motor Company (South Korea), Hyundai India has built a robust portfolio of SUVs and electric vehicles tailored for Indian buyers. With models like the Creta and Exter driving volume, Hyundai continues to balance localisation with export excellence, maintaining operations across 1,200 touchpoints nationwide.
Kia India
Kia has emerged as a breakout performer in the Indian market, achieving its best-ever monthly sales in December 2025. Its strategy focuses on design appeal and premium features in accessible price brackets, resonating with younger customers.
The December 2025 performance was uniformly strong across urban and semi-urban centres. Tier 2 and Tier 3 cities contributed significantly, underscoring deepening motorisation beyond metros.
While southern and western India maintained leadership in SUV uptake, northern states such as Haryana, Uttar Pradesh, and Punjab saw robust sales in small and mid-sized cars due to GST benefits and improved rural incomes.
Despite the buoyant mood, automakers face emerging headwinds:
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Price Normalisation and Cost Inflation: With commodity prices stabilising, OEMs are likely to pass on some cost pressures to consumers in Q1 2026.
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EV Competition: New entrants like JSW MG and Mahindra’s electric SUV line threaten Tata’s EV dominance.
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Small Car Saturation: The segment’s revival may moderate as buyers shift toward compact SUVs.
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Global Trade Risks: Tariff fluctuations and EV import norms could alter future pricing structures.
The competition will hinge on innovation, localisation, and consumer financing solutions.
The Indian passenger vehicle industry is poised for 6–7% growth in 2026, led by new launches, hybrid expansion, and continued electric adoption. Manufacturers are expected to enhance digital retail and subscription-based ownership models.
Policy continuity, strong rural sentiment, and global partnerships position India not just as a thriving domestic market but also as an export hub for SUVs and EVs. As Maruti forecasts a steady recovery in compact cars and Tata doubles down on EV infrastructure, the coming year promises continued transformation and sustained market momentum.
India’s December 2025 passenger vehicle performance wasn’t just a statistical milestone — it was a reflection of consumer confidence, policy efficiency, and automaker resilience. As the nation accelerates toward a sustainable mobility future, 2026 could well mark the start of India’s ascendance as a global automotive powerhouse.
1. What were India’s total car sales in December 2025?
India’s passenger vehicle sales reached 407,497 units in December 2025, up 26.2% year-on-year — the first time monthly sales crossed 400,000 units.
2. Which car company sold the most in December 2025?
Maruti Suzuki led with 217,854 units, capturing over 50% market share.
3. What drove the record growth?
Key drivers included GST rationalisation, repo rate cuts, income tax rebates, festive carryover, and year-end discounts.
4. How did electric vehicles perform in 2025?
India sold 176,500 electric passenger vehicles, up 77% year-on-year.
5. What is the growth outlook for 2026?
Analysts project 6–7% passenger vehicle growth in 2026, supported by new launches and continued EV expansion.